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By John Ruwitch
HANOI Dec 8 Troubled Vietnamese shipbuilder Vinashin is
responsible for re-paying its own debts, including $60 million due later this
month to international creditors, a government minister said on Wednesday.
The comments by Minister of Planning and Investment Vo Hong Phuc confirmed
that one of the country's biggest state-owned firms was unlikely to get
financial aid from the government to tackle a mountain of debt that brought it
close to bankruptcy.
"As we have said, we will make efforts so that Vinashin can operate
profitably so that it can re-pay its debts on its own," Phuc told reporters.
The government announced earlier this year that Vinashin, or the Vietnam
Shipbuilding Industry Group, was near collapse under some $4.4 billion in debt
it had racked up through rapid expansion and a slump in shipping during the
It ordered the bloated conglomerate to be reorganised, raising questions
about repayment of the debt.
Vinashin's first test comes on Dec. 20 when $60 million on a $600 million
eight-year loan to a consortium of creditors led by Credit Suisse
comes due, but it has asked for a delay.
The creditors were expected to be meeting on Wednesday to discuss the
Phuc, asked specifically if Vinashin's responsibility for its own debts
included the upcoming $60 million payment, replied: "That is correct, they
must pay it by themselves".
What happens to Vinashin will set the tone for Vietnamese borrowing in the
near future. Should Vinashin fail to make its debt payments, not only would
the cost of capital rise for other state-owned companies, but questions may be
asked about the government's ability to service its debt, analysts say.
Standard & Poor's on Monday cut its long-term credit rating on Vietnam's
state mining group Vinacomin after signs the government might not help
Vinashin with debt payments. [ID:nSGE6B501X]
(Editing by Lincoln Feast)